The Start-up That's Disrupting Music
The success of Audius will not only change the music industry but give a big boost to Solana
It’s not a secret that the entertainment industry is one of the most corrupt and sleazy industries out there. Within entertainment, the music industry is known to be cut-throat and brutal. It is an industry where the gate-keepers (i.e.: - record labels and streaming services like Spotify) make most of the money while musicians make pennies.
It is no secret that for years record labels were the gatekeepers and king-makers in the music industry. Now the way we all consume music has changed. As shown below, In 2021 streaming overtook radio as the way we listen to music.
Streaming’s popularity is even more evident by age categories. As shown below the majority of people aged between 18 and 44 listen to music through streaming.
On the other hand, only the majority of people aged 65+ listen to music using the radio.
This is why Spotify has had a great few years. As you can see below Spotify has seen a 15% year-on-year subscriber growth.
Thanks to this heavy subscriber growth the company has seen its revenue grow significantly as well (by a CAGR of 40%).
Spotify has also done some very savvy business moves where the company has exclusive rights over podcasts like the Joe Rogan show. The Joe Rogan show brings in 11 million users, which is way more than any cable news show. Having exclusive podcasts brings in more listeners and makes Spotify a company with a wider moat.
But Streaming has a negative side. During the era of selling physical albums, 10 to 20% of all album sales went to the musician. But with streaming the economics is different. In the case of streaming, all the revenues from the various artists are pooled and go to the artist’s record label. The record label gets paid based on how much music is streamed by the record label’s signed artists. This means that for a musician to get paid it’s not just his/her music that needs to be streamed many times but other musicians under his/her record label. Under this economic system, 46% of streaming revenue goes to musicians. While the rest goes to the streaming service, musicians only get 7% of the streaming revenue. Imagine any sports league, say the NFL, NBA, or English Premier League, where the players only get 7% of the sports earnings?
This is the problem that Audius clearly saw. Audius wants to get rid of the music “middlemen” and give musicians the pay they rightfully deserve. Audius also wanted musicians to directly interact with their fans (as shown below).
Audius was created by Roneil Rumburg and Forrest Browning. Both graduated from Stanford University and started technology start-ups before building Audius.
How Audius works is that every time a listener listens to your music, you get paid with Audius tokens. You can even earn Audius tokens by being a top listener on Audius. Audius pays 90% of its revenue to musicians. Audius tokenomics include:
Currently on CoinGecko Audius (AUDIO) is ranked 189 by crypto market cap
Market cap: $156,088,206
Total Supply: 1,118,738,925 coins
Show below is the market cap of AUDIO coin since the creation of Audius compared to Bitcoin (in orange) and ETH (in red). This is from CoinGecko.
The market cap of AUDIO has grown from just $4.7 million to $160 million. The current price of one AUDIO token is $0.19. Last but not least shown below is the ownership distribution of AUDIO tokens.
Audius has grown to have 100,000 musicians and 4 million listeners. Outside of institutional investors like Multicoin Capital, Pantera, M31 Capital, some other notable investors include musicians and DJs like Steve Aoki, Chainsmokers, Katy Perry, and Jason Derulo. Clearly, big-name musicians are interested in Blockchain’s disruption of the music industry.
In my subheading, I say the success of Audius will give a big boost to Solana. The reason why I say that is because Audius is one of the large decentralized app projects to migrate from the Ethereum network to the Solana network. Already so many crypto projects are being built on Solana. As of March 2022, Solana has the second fastest-growing developer ecosystem within Blockchain.
Solana is also one of the fastest-growing crypto ecosystems. As you can see below compared to ETH Solana can conduct 50,000 transactions per second. Its average cost per smart contract interaction is less than a cent. Even Bitcoin can only do 15 transactions per second.
Solana is one of the fast-growing crypto ecosystems. Audius is a game-changing app on the ecosystem because an industry outside of finance and banking is being disrupted. Already you are seeing musicians in hip-hop and electronic music flock to spread their hits on the blockchain platform. Audius still has a way to go in competing against streaming giants Spotify, Apple Music, and TIDAL (which is now owned by Square’s parent company Block). But in just 2 years, Audius’ and its cryptocurrency’s growth has been impressive. The success of Audius will not only disrupt the music industry and give independent musicians the wealth and freedom they rightfully deserve, but this is also going to give a huge boost to the Solana network.
What I write here is not investment advice. Please do your own research before investing. I write these mostly for educational purposes. Investing in crypto is very very very risky!
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